ARCHIVED General Conditions - Long Form

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Item Information

Revision History

Date Status ID Title
1992-04-01 Cancelled 9329-1 ARCHIVED: General Conditions - Long Form (1992-04-01) 9329-1

Remarks – Recommended Use of SACC Item

No remarks.

Legal text for SACC item

9329-1 01     (06/91)       Interpretation


(1) In the Contract,  

       (a) "Canada", "Crown" or "Her Majesty", means Her Majesty in right 
       of Canada;

       (b) "Contract" means these General Conditions, the agreement to 
       which these are attached, and every other document specified or 
       referred to in the agreement as forming part of the agreement 
       including amendments to the agreement;

       (c) "Contract Price" means the amount expressed in the Contract to 
       be payable to the Contractor for the Work;

       (d) "Government Issue" means all materials, parts, components, 
       Specifications, equipment, articles and things supplied to the 
       Contractor by or on behalf of Canada for the purposes of the 
       Contract;

       (e) "Minister" means the Minister of Supply and Services and any 
       other person duly authorized to act on behalf of the Minister of 
       Supply and Services;

       (f) "Specifications" means the documents referred to in the Contract 
       that contain the functional or technical description of the Work and 
       includes: 

              (i) documents attached or referred to in the Contract such as 
              plans, statements of work, patterns, drawings, designs and 
              other information, and 

              (ii) samples and models;

       (g) "Work" means the whole of the services, materials, equipment, 
       matters and things required to be done, furnished or performed by 
       the Contractor in order to carry out the Contract.  

(2) The headings used in these terms and conditions are inserted for 
convenience of reference only and shall not affect their interpretation.  

(3) Where the Contract is a defence contract within the meaning of the 
Defence Production Act, it is subject to that Act and shall be governed 
accordingly. 

9329-1 02     (06/91)       Authorities and Designations


(1) "Contracting Authority" means the contracting officer designated in the 
Contract to act as the representative of the Minister.  The Contracting 
Authority is responsible for the management of the Contract. Any changes to 
the Contract must be authorized by a formal amendment to the Contract 
issued by the Contracting Authority. 

(2) "Design Authority" means the person designated as such in the Contract. 

(3) "Scientific Authority" means the person designated as such in the 
Contract to act as the representative of the minister for whose department 
or agency the Work is being carried out.  The Scientific Authority is 
responsible for all matters concerning the scientific and technological 
content of the Work under the Contract. Any proposed changes to the scope 
of the Work are to be discussed with the Scientific Authority but approval 
of such changes for incorporation in the Contract by amendment thereto 
remains with the Contracting Authority.  

(4) "Inspection Authority" means the person designated as such in the 
Contract and includes any person acting on behalf of Canada or the Minister 
as the Inspection Authority in relation to the Contract.  For purposes of 
contracts for the Department of National Defence, Inspection Authority 
includes quality assurance authority. 

(5) "Technical Authority" means the person, including the Design Authority 
or Scientific Authority, as applicable, designated as such in the Contract 
to act as the representative of the minister for whose department or agency 
the Work is being carried out.  The Technical Authority is responsible for 
all matters concerning the technological content of the Work under the 
Contract. 

9329-1 03     (06/91)       Powers of the Minister


Nothing contained in or omitted from the Contract shall restrict any of the 
rights or powers of Canada or the Minister existing under the laws in force 
in Canada.  Every right, remedy, power and discretion vested in the 
Minister under the Contract shall be cumulative and non-exclusive. 

9329-1 04     (06/91)       Status of the Contractor


(1) The following provision shall apply to a Contract for the performance 
of services including research and development or related scientific 
activities as distinct from a Contract for the supply of goods.  

(2) This Contract is for the performance of a service and the Contractor is 
engaged as an independent contractor for the sole purpose of performing the 
Work.  Neither the Contractor nor any of its personnel is engaged as an 
employee, servant or agent of Canada.  The Contractor is responsible for 
any and all deductions and remittances required to be made including those 
required for Canada or Quebec Pension Plans, Unemployment Insurance, 
Workmen's Compensation, or Income Tax. 

9329-1 05     (06/91)       Assignment


(1) The Contract shall not be assigned by the Contractor without the prior 
consent in writing of the Minister and any purported assignment made 
without that consent is void and of no effect.  

(2) No assignment of the Contract shall relieve the Contractor from any 
obligation under the Contract or impose any liability upon Canada or the 
Minister, unless otherwise agreed to by the Minister. 

(3) In any assignment, the Contractor agrees to bind the assignee by the 
same terms and conditions by which the Contractor is bound under the 
Contract, unless otherwise agreed to by the Minister. 

9329-1 06     (06/91)       Subcontracting


(1) In this section, "Subcontracting" means the process whereby a 
contractor (the prime contractor) enters into a contract with another 
contractor (the subcontractor) to carry out a portion of the Work which the 
prime contractor had contracted to carry out.  

(2) Unless otherwise provided in the Contract, the Contractor shall obtain 
the consent of the Minister in writing prior to the subcontracting of any 
portion of the Work.  Any consent to a subcontract shall not relieve the 
Contractor from its obligations under the Contract or be construed as 
authorizing the establishment of any liability whatsoever on the part of 
Canada or the Minister to a subcontractor.

(3) In any subcontract, other than a subcontract referred to in paragraph (
4)(a), the Contractor agrees to bind the subcontractor by terms and 
conditions similar to and, in the opinion of the Minister, not less 
favourable to Canada than the Contract, to the extent they are applicable 
to the work subcontracted, unless the Minister otherwise consents.  

(4) Notwithstanding subsection (2), the Contractor may, without prior 
consent of the Minister:  

       (a) purchase "off the shelf" items and such standard articles and 
       materials as are ordinarily manufactured or produced by mills and 
       manufacturers in the normal course of business;
 
       (b) subcontract for the provision of services as are ordinarily 
       performed by suppliers of such services in their normal course of 
       business;

       (c) subcontract any of the Work to any one subcontractor up to a 
       value in the aggregate of $100,000;

       (d) authorize its first and subsequent tier subcontractors to make 
       purchases or subcontract as permitted in paragraphs (a) through (c). 

(5) The Contractor is not obliged to seek consent to subcontracts 
referenced in the Contract. 

9329-1 07     (06/91)       Specifications


(1) The Contractor shall use specifications furnished to the Contractor by 
Canada in connection with the Contract solely for the purpose of carrying 
out the Work, unless prior written consent to the contrary is given by the 
Minister.  

(2) The Specifications referred to in subsection (1) shall remain the 
property of Canada and shall not be disclosed to a third party, other than 
for the purpose of carrying out the Work, including the placing of 
subcontracts, without prior written consent of the Minister.  

(3) Any minor functional or technical descriptions of the Work not shown in 
the Specifications referred to in subsection (1), but which are necessary 
for the due completion of the Work, shall be deemed to be included in the 
Specifications and no addition to the Contract Price will be allowed by 
reason of such omission, unless otherwise provided for in the Contract.  

(4) Where pursuant to the terms of the Contract, Specifications furnished 
by the Contractor are subject to approval by the Minister or the Technical 
Authority, such approval shall not relieve the Contractor of its 
responsibility to complete the Work and to meet all requirements of the 
Contract. 

9329-1 08     (06/91)       Conduct of the Work


(1) The Contractor represents that:  

       (a) it is competent to perform the Work; and  

       (b) it has the necessary qualifications including knowledge and 
       skill, with the ability to use them effectively in performing the 
       Work.  

(2) In the performance of the Work, the Contractor shall supply, other than 
Government Issue, all the resources, facilities, labour and supervision, 
management services, equipment, materials, drawings, technical data, 
technical assistance, engineering services, inspection and quality 
assurance procedures and planning necessary to perform the Work.  

(3) The Contractor shall:  

       (a) carry out the Work in a diligent and efficient manner;

       (b) apply such quality assurance tests, inspections, and controls as 
       it normally applies in similar Work; and  

       (c) ensure that the Work:   

              (i) is of proper quality, material and workmanship;

              (ii) is in full conformity with the Specifications; and 

              (iii) meets all other requirements of the Contract. 

(4) Unless the Minister orders a suspension of the Work or part of the Work, 
the Contractor shall not otherwise stop or suspend the Work pending the 
settlement or determination of any differences arising out of the Contract.  

(5) The Contractor shall provide such reports on the performance of the 
Work as are required by the Contract and such other reports as may be 
reasonably required by the Minister and the Technical Authority.  

(6) Where the Crown provides advice or direction, without or upon 
invitation by the Contractor, to assist the Contractor to expedite the 
completion of the Work, unless such advice or direction is provided to the 
Contractor in writing by the Contracting Authority and is accompanied by a 
statement which specifically relieves the Contractor of any responsibility 
for any negative consequences or extra costs which might arise from 
following that advice or direction, the Contractor remains fully 
responsible for such negative consequences or extra costs. 

9329-1 09     (06/91)       Replacement of Personnel


(1) When specific personnel have been named in the Contract, the Contractor 
shall provide the services of the personnel so named to perform the Work, 
unless the Contractor is unable to do so for reasons which are beyond its 
control.  

(2) Where, at any time, the Contractor is unable to provide the services of 
specified personnel named in the Contract, it shall provide replacement 
persons who are of similar ability and attainment and who are acceptable to 
both the Technical Authority and the Minister.   
(3) The Contractor shall give notice to both the Minister and the Technical 
Authority of:  

       (a) the reason for the removal of the named personnel from the Work; 
       and  

       (b) the names of the proposed replacement personnel. 

(4) The Contractor shall not, in any event, allow performance of the Work 
by unauthorized replacement personnel.  

(5) Acceptance of a replacement person by the Technical Authority and the 
Minister shall not relieve the Contractor from responsibility for failure 
to meet the requirements of the Contract.  

9329-1 10     (06/91)       Time of Essence


Time is of the essence in the Contract.  

9329-1 11     (06/91)       Excusable Delays


(1) An unforeseen event beyond the reasonable control of the Contractor, 
which could not have been circumvented by the Contractor and which affects 
the timely performance of the Work, constitutes an excusable delay.  Such 
events may include but are not restricted to: acts of God, acts of Her 
Majesty, acts of provincial or local governments, floods, epidemics, 
quarantine restrictions, freight embargoes, severe weather, and, if beyond 
the reasonable control of the Contractor, fires, strikes and labour unrest.  

(2) Where there is an excusable delay, then the Contractor shall be allowed 
a reasonable extension of time for delivery of that portion of the Work 
affected by the excusable delay.  

(3) As soon as the Contractor knows of an event likely to cause an 
excusable delay, the Contractor shall promptly give notice to the Minister 
of the event, the estimated delay and the portion of the Work affected.  

(4) Within fifteen (15) days, or such further time as may be agreed to by 
the Minister, of the notice required by subsection (3) of this section, the 
Contractor shall give a further notice to the Minister setting forth a 
proposed work-around plan and other means proposed to remedy the cause or 
cure such delay and to prevent or avoid further delays.  

(5) Where the Contractor fails to give notice in accordance with 
subsections (3) and (4), any delay shall not constitute an excusable delay.  
 
(6) Canada shall not be liable for any costs or charges incurred by the 
Contractor as a result of an excusable delay. 

9329-1 12     (06/91)       Suspension of the Work


The Minister may at any time, by notice, order a suspension of the Work or 
part thereof for a period of up to 180 days.  At any time prior to the 
expiration of such 180 days, the Minister shall either rescind the order or 
terminate the Contract in whole or in part. When an order is made pursuant 
to this section:  

       (a) the Contractor shall be entitled to be paid its additional costs 
       and expenses reasonably and properly incurred as a result of the 
       suspension plus a fair profit thereon;

       (b) the date for the performance of that part of the Work affected 
       by the suspension shall be extended for a period equal to the period 
       of suspension plus a period, if any, which in the opinion of the 
       Minister, in consultation with the Contractor, is reasonably 
       necessary for the Contractor to resume work; and

       (c) the Contracting Authority shall make an equitable adjustment as 
       necessary to affected terms and conditions of the Contract subject 
       to the section of the General Conditions entitled "Changes and 
       Amendments." 

9329-1 13     (06/91)       Inspection and Acceptance


(1) The Work and any and all parts thereof shall be subject to such 
inspection as the Inspection Authority determines to be appropriate, 
consistent with the relevant provisions, if any, of the Contract, prior to 
acceptance by Canada.  The Inspection Authority or its representative shall 
have access to the Work at all times during working hours where any part of 
the Work is being carried out.  Should the Work or any part thereof not be 
in accordance with the requirements of the Contract, the Inspection 
Authority shall have the right to reject the Work and require its 
correction.  The Contractor shall provide, at its own expense, all 
assistance and facilities, test pieces and samples which the Inspection 
Authority may reasonably require for the carrying out of any such 
inspection and the Contractor shall forward, at its own expense, such test 
pieces and samples to such person or location as the Inspection Authority 
may direct. Inspection by the Inspection Authority shall not relieve the 
Contractor from responsibility to meet the requirements of the Contract.  
The Contractor agrees to accept and be bound by the Inspection Authority's 
interpretation of the meaning of the Specifications insofar as such 
interpretation is not contradictory to the wording of the work statement.  
 
(2) No part of the Work shall be submitted for acceptance or delivery until 
inspected and approved by the Contractor and, wherever practicable, marked 
with an approval stamp satisfactory to the Inspection Authority.  The 
Contractor shall keep proper and adequate inspection records which shall be 
made available to the Inspection Authority, who may make copies thereof and 
take extracts therefrom, during the performance of the Contract and for any 
period of time thereafter as provided in the Contract. 

9329-1 14     (06/91)       Title


(1) Except as otherwise provided in the Contract, and subject to subsection 
(2), title to the Work or any part thereof shall vest in Canada upon 
delivery and acceptance thereof by or on behalf of Canada.

(2) Upon any payment to the Contractor, whether it is made as a progress 
payment, advance payment or otherwise, in respect of the Work or any 
portion thereof, title to the Work or any part thereof in respect of which 
such payment is made shall vest in Canada.  

(3) Any vesting of title referred to in subsection (2) shall not constitute 
acceptance by Canada of the Work and shall not relieve the Contractor of 
any obligations to perform the Work in accordance with the Contract.  

(4) Where title to the Work or to any part of the Work becomes vested in 
Canada, the Contractor shall establish to the Minister's satisfaction that 
the title is free and clear of all claims, liens, attachments, charges or 
encumbrances and shall execute such conveyances thereof and other 
instruments as the Minister may request. 

9329-1 15     (06/91)       Payment


(1) In this section:  

       (a) an amount is "due and payable" when it is due and payable by 
       Canada to the Contractor according to the terms of the Contract;

       (b) an amount is "overdue" when it is unpaid on the first day 
       following the day upon which it is due and payable;

       (c) "Date of Payment" means the date of the negotiable instrument 
       drawn by the Receiver General for Canada and which is given for 
       payment of an amount due and payable;

       (d) "Bank Rate" means the discount rate of interest set by the Bank 
       of Canada.  
 
(2) No payment shall be made to the Contractor unless or until:  

       (a) invoices, inspection notes and all other documents prescribed in 
       the Contract are submitted in accordance with the terms of the 
       Contract or instructions of the Minister;

       (b) with respect to all parts of the Work, the cost of which has 
       been paid by the Contractor and in respect of which payment is being 
       made by Canada, the Contractor, where required to do so, establishes 
       to the satisfaction of the Minister that such parts of the Work are 
       free from all claims, liens, attachments, charges or encumbrances;

       (c) with respect to all parts of the Work, the costs of which have 
       been recorded in the accounts of the Contractor as a liability to be 
       discharged in the normal course of business and in respect of which 
       parts of the Work payment is being made by Canada, the Contractor, 
       where required to do so, establishes to the satisfaction of the 
       Minister that it is not, in the ordinary course of business, 
       delinquent in discharging its recorded liabilities arising from the 
       performance of the Contract and that the payment to be made by 
       Canada shall be used only for the purpose of discharging such 
       liability and that upon such discharge the parts of the Work shall 
       be free from all claims, liens, charges or encumbrances; and  

       (d) in the case of payment in respect of finished Work, such 
       finished Work has been accepted in accordance with the terms of the 
       Contract.  

(3) Subject to subsection (2), Canada will pay all amounts due and payable 
within thirty (30) days calculated from:  

       (a) the date that the invoice or progress claim and other required 
       documentation is received; or 

       (b) the date of delivery, where delivery before payment is required 
       by the Contract; 

whichever is the later date.  

(4) Where Canada has any objection to the form of the invoice or the 
substantiating documentation, it shall notify the Contractor of the nature 
of the objection within fifteen (15) days of its receipt. Where Canada does 
not notify the Contractor of any objection to the form of invoice or the 
substantiating documentation within fifteen (15) days of receipt of the 
invoice, subsection (3) is applicable with respect to the calculation of 
the date that the invoice amount is due and payable.  

(5) In the event that payment is not effected within the time referred to 
in subsection (3), the Contractor's sole right and remedy shall be that 
Canada shall be liable to pay, without demand from the Contractor, simple 
interest at the Bank Rate plus 1 1/4 per centum on any amount which is 
overdue from the day such amount became overdue until the day prior to the 
date of payment, inclusively; however, interest will not be payable or paid 
unless the amount has been outstanding (unpaid) for more than fifteen (15) 
days following the due date. Interest will not be payable on overdue 
advance payments.  

(6) The Bank Rate used shall be that prevailing at the opening of business 
on the date of payment. 

9329-1 16     (06/91)       Indemnity Against Claims


(1) Subject to subsection (2), the Contractor agrees to indemnify Canada 
against any claims, actions, suits and proceedings for the infringement or 
alleged infringement of any Canadian or United States patent, or copyright 
and for royalties or other payments which may be payable in connection with 
carrying out the Contract and in respect to the use of or disposal by 
Canada of anything furnished pursuant to the Contract, unless Canada has 
been informed of any such claim or proceeding and continues to use or 
dispose of the commodity furnished under the Contract that is the subject 
of the claim or proceeding.  

(2) Canada agrees to indemnify the Contractor for expenses that the 
Contractor sustains as a result of any claim or proceeding against the 
Contractor based upon the use, by the Contractor in performing the Contract, 
of any patented invention, copyrighted work or registered industrial design:   

       (a) resulting from anything supplied by or on behalf of Canada that 
       is embodied in equipment or Specifications furnished to the 
       Contractor; or  

       (b) resulting from the Contractor complying with production drawings 
       not prepared by the Contractor and supplied by the Minister which 
       direct an alteration of or modification to the Work. 

(3) The Minister shall forthwith give notice to the Contractor that any 
claim, action, suit or proceedings referred to in subsection (2) has been 
made or commenced and the Contractor shall, unless otherwise directed by 
the Minister, conduct at its own expense all negotiations for settlement of 
same.  

(4) The Contractor shall indemnify and save harmless Canada in respect of 
any claim, loss, damage or expense relating to:  

       (a) any injury or death of a person, or loss of or damage to 
       property, caused or alleged to be caused as a result of performing 
       the Contract; and  
 
       (b) any lien, attachment, charge, encumbrance or similar claim upon 
       any property vested in Canada under the Contract. 

(5)  (a) The Contractor shall notify the Minister of all royalties which it 
or
       any of its subcontractors will or may be obligated to pay or propose 
       to pay, in respect of carrying out the Contract, and the basis 
       thereof, and the parties to whom the same are payable, and shall 
       promptly advise the Minister of any and all claims which would or 
       might result in further and different payments by way of royalties 
       being made by the Contractor or any of its subcontractors.  

       (b) Where, and to the extent that the Minister so directs, the 
       Contractor shall not pay and shall direct its subcontractors not to 
       pay any royalties in respect of the carrying out of the Contract. 

       (c) From and after giving of any direction referred to in paragraph 
       (b), and subject to compliance by the Contractor with the foregoing 
       provisions, Canada shall relieve and indemnify the Contractor from 
       and against all claims, actions or proceedings for payment of such 
       royalties as are covered by such direction.  

       (d) The Contract Price shall be reduced by the amount of royalties 
       included therein to which the indemnity provided in paragraph (c) of 
       this subsection applies. 

9329-1 17     (06/91)       Termination for Convenience


(1) Notwithstanding anything contained in the Contract, the Minister may, 
at any time prior to the completion of the Contract, by giving notice to 
the Contractor (hereinafter sometimes referred to as a "termination notice"), 
terminate all or any part of the Work not completed. Upon a termination 
notice being given, the Contractor shall cease Work (including the 
manufacture and procuring of materials for the fulfilment of the Contract) 
in accordance with and to the extent specified in such notice, but shall 
proceed to complete such part or parts (if any) of the Work that are not 
affected by the notice of termination.  The Minister may, at any time or 
from time to time, give one or more additional termination notices with 
respect to any or all parts of the Work not terminated by any previous 
termination notice. 

(2) In the event of a termination notice being given pursuant to subsection 
(1):  

       (a) all completed Work, whether completed before the giving of the 
       termination notice or completed pursuant to the termination notice, 
       shall be paid for (subject to inspection and acceptance in 
       accordance with the provisions of the Contract) on the basis of the 
       Contract Price for firm price contracts, or in accordance with the 
       terms hereof for cost reimbursable contracts;

       (b) any Work not completed before the giving of the termination 
       notice and not completed thereafter pursuant to such notice, the 
       Contractor shall be entitled to be reimbursed the actual cost to the 
       Contractor of such uncompleted Work, and to receive in addition an 
       amount representing a fair and reasonable profit on such cost.  For 
       firm price contracts, cost shall be determined in accordance with 
       the provisions of the Contract, subject to any modifications thereof 
       which the Minister may consider appropriate in the circumstances. 
       For cost reimbursable contracts, cost shall be determined under the 
       provisions hereof;

       (c) except as provided in paragraph (d), the Contractor shall be 
       entitled to be reimbursed the amount of any capital expenditures 
       specifically authorized by the Contract or approved by the Minister 
       for the purpose of the Contract (and actually made or incurred) to 
       the extent that the same (less any depreciation in respect thereof 
       already taken into account in determining cost) were reasonably and 
       properly incurred by the Contractor and are properly apportionable 
       to the performance of the Contract and not included in the amounts 
       paid or payable to the Contractor in respect of completed Work;

       (d) where the Contract is exclusively a Contract for the making of 
       capital expenditures in respect of additional equipment or plant 
       additions, paragraphs (a) through (c) inclusive shall not apply but 
       Canada shall pay or reimburse the Contractor for the reasonable and 
       proper cost to the Contractor, not previously paid by Canada, of: 

              (i) all additional equipment which, prior to the giving of 
              the termination notice, shall have been purchased, acquired 
              or manufactured by the Contractor, or contracted for and for 
              which the Contractor is obligated to make payments, and     

              (ii) all additional equipment in process of manufacture by 
              the Contractor as at the date of giving of such notice and 
              all work in connection with the construction of the plant 
              addition up to the said date, including the cost of materials 
              and parts contracted for by the Contractor for the purpose of 
              such manufacture or construction and for which the Contractor 
              is obligated to make payment.    
 
(3) No reimbursement shall be made in respect of any of the Work which has 
been or may be rejected after inspection as not complying with the 
requirements of the Contract.    

(4) The Contractor shall not be entitled to be reimbursed any amount which, 
taken together with any amounts paid or due or becoming due to the 
Contractor under the Contract, shall exceed the Contract Price applicable 
to the Work or the particular part thereof.    

(5) Notwithstanding subsections (1) through (4) inclusive, the amounts to 
which the Contractor shall be entitled to be reimbursed in the event of the 
giving of a termination notice shall include,  

       (a) the costs to the Contractor of and incidental to the 
       cancellation of obligations incurred by the Contractor pursuant to 
       the termination notice;

       (b) the cost of preparing the necessary accounts and statements with 
       respect to Work performed to the effective date of such termination;

       (c) the costs of commitments made by the Contractor with respect to 
       the terminated portions of the Work;

       (d) wages which the Contractor is obligated under any laws and 
       regulations for the time being in force, to pay to the employees 
       whose services are no longer required by reason of such termination;

       (e) the costs of and incidental to the taking of an inventory of 
       materials, components, work in process and finished work on hand at 
       the effective date of the termination; and    

       (f) other costs and expenses of and incidental to the termination, 
       in whole or in part, of operations under the Contract provided 
       always that payment and reimbursement under the provisions of this 
       subsection shall be made only to the extent that it is established 
       to the satisfaction of the Minister that the costs and expenses 
       aforesaid were actually incurred by the Contractor and that the same 
       are reasonable and are properly attributable to the termination of 
       the Work or the part thereof so terminated.

(6) In the procuring of materials and parts required for the performance of 
the Contract and the subcontracting of any of the Work, the Contractor, 
unless otherwise authorized by the Minister, shall place purchase orders 
and subcontracts on terms that will enable the Contractor to terminate the 
same upon conditions and terms similar in effect to those provided in this 
section, and generally, the Contractor shall co-operate with the Minister 
and do everything reasonably within its power at all times to minimize and 
reduce the amount of Canada's obligations in the event of Contract 
termination. 

(7) Title to all materials, parts, plant, equipment and work in process in 
respect of which reimbursement is made to the Contractor upon such 
reimbursement being made, shall pass to and vest in Canada unless already 
so vested under any other provision of the Contract, and such materials, 
parts, plant, equipment and work in process shall be delivered to the order 
of the Minister, but the materials thus taken over will in no case be in 
excess of what would have been required for performing the Work in full if 
no Termination Notice had been given.   

(8) The Contractor shall have no claim for damages, compensation, loss of 
profit, allowance or otherwise by reason of or directly or indirectly 
arising out of any action taken or termination notice given by the Minister 
under or pursuant to the provisions of this section, except to the extent 
this section expressly provides.  

9329-1 18     (06/91)       Default by the Contractor


(1) Where the Contractor is in default in carrying out any of its 
obligations under the Contract, the Minister may, upon giving notice to the 
Contractor, terminate for default the whole or any part of the Contract, 
either immediately or at the expiration of a cure period specified in the 
notice, where the Contractor has not cured the default to the satisfaction 
of the Minister within the said cure period.    

(2) Where the Contractor becomes bankrupt or insolvent, or has a receiving 
order made against it, or makes an assignment for the benefit of creditors, 
or where an order is made or a resolution passed for winding up of the 
Contractor, or where the Contractor takes the benefit of any statute for 
the time being in force relating to bankrupt or insolvent debtors, the 
Minister may, upon giving notice to the Contractor, terminate for default 
the whole or any part of the Contract.    

(3) Upon the giving of a notice referred to in subsection (1), the 
Contractor shall have no claim for further payment, other than as provided 
in this section, but shall remain liable to Canada for all loss and damage 
which may be suffered by Canada by reason of the default or occurrence upon 
which such notice was based.  

(4) Where, subsequent to issuance of a notice pursuant to subsection (1), 
it is determined by the Minister that the default of the Contractor is due 
to an event which constitutes an excusable delay, such notice will be 
considered notice under subsection 17(1) of these General Conditions 
(Termination for Convenience).  
 
(5) Upon termination of the Contract under this section, the Minister may 
require the Contractor to deliver to Canada, in the manner and to the 
extent directed by the Minister, any completed parts or part of the Work 
which have not been delivered and accepted prior to such termination and 
any materials, work in process, or tools, which the Contractor has 
specifically acquired or produced in the fulfilment of the Contract.    

(6) Subject to the deduction of any claim which Canada may have against the 
Contractor arising under the Contract or out of the termination, Canada 
shall pay or credit to the Contractor the value of all such completed part 
or parts of the Work delivered and accepted by Canada determined in 
accordance with the Contract, plus, in the case of a Contract or part 
thereof with a cost plus or in the case of a Contract or part thereof with 
a cost reimbursable basis of payment, the proportional part of any profit 
fixed by the said Contract, and shall pay or reimburse the Contractor the 
reasonable and proper cost to the Contractor of all materials or work in 
process delivered to Canada pursuant to such direction, but in no event 
shall the aggregate of the amounts paid to date of default and any amounts 
otherwise payable pursuant to this subsection exceed the total Contract 
Price.  

9329-1 19     (06/91)       Use of Canadian Labour and Materials


The Contractor shall use Canadian labour and materials in carrying out the 
Work, to the full extent to which they are procurable, consistent with 
proper economy and the expeditious carrying out of the Work.  

9329-1 20     (06/91)       Government Issue


(1) All Government Issue shall be used by the Contractor solely for the 
purpose of the Contract and shall remain the property of Canada, and the 
Contractor shall maintain adequate accounting records of all Government 
Issue, and whenever feasible, shall mark the same as being property of 
Canada.  

(2) All Government Issue, except such as are installed or incorporated into 
the Work, shall, unless otherwise specifically provided in the Contract, be 
returned to Canada on demand in the same condition as when supplied to the 
Contractor, provided that the Contractor shall not be responsible for any 
loss or damage arising from ordinary wear and tear.    

(3) All scrap and waste materials, articles or things which are the 
property of Canada, shall, unless otherwise provided in the Contract, 
remain the property of Canada and shall be disposed of only as prescribed 
by the Minister.  
 
9329-1 21     (06/91)       Secrecy and Protection of the Work


(1) The Contract and all information issued, used or disclosed in 
connection with the Work, excluding the Contractor's own information or 
information generally available to the public, are to be held in confidence 
and may be classified as to the degree of precaution necessary for their 
safekeeping.    

(2) The Contractor shall at all times take all measures reasonably 
necessary, including those set out in the DSS Industrial Security Manual 
and its supplements, and any other instructions issued by the Minister, for 
the protection of the same and of Canada's properties and secrets. 

(3) Without limiting the generality of subsections (1) and (2), when the 
Contract or any of the Work is classified for security purposes and is not 
to be released to any third parties, the Minister shall be entitled to 
inspect the Contractor's premises for security purposes at regular 
intervals during the term of the Contract, and the Contractor shall comply 
with all written instructions issued by the Minister dealing with such 
classified material, including any requirement that employees of the 
Contractor execute and deliver declarations relating to security clearances 
and other procedures.   (4) Any proposed change in the security 
classification or security requirements after the date of Contract award 
shall be subject to the provisions of section 35.  

9329-1 22     (06/91)       Technical Information and Inventions


(1) In this section:    

       (a) "Invention" means any new and useful art, process, methodology, 
       technique, machine, manufacture or composition of matter, or any new 
       and useful improvement thereof, whether or not patentable; and  

       (b) "Technical Information" means any and all information of a 
       scientific or technical nature relating to the Work, including 
       experimental and test data, techniques, methods, processes, know-how, 
       magnetic tape, computer memory printouts, or data retained in 
       computer memory, designs, technical reports, photographs, drawings, 
       plans, specifications, models, prototypes, patterns, samples and any 
       other technical data in whatever form presented and whether or not 
       susceptible to copyright.  

(2) Ownership of all Technical Information and Inventions conceived, 
developed or first actually reduced to practice in the performance of the 
Work vests in Canada and, unless otherwise specified in the Contract, the 
Contractor shall not at any time divulge or use such Technical Information 
or Inventions other than in performing the Work under the Contract, and 
shall not sell, other than to Canada, any articles or things embodying such 
Technical Information or Inventions.    

(3) Ownership of all property, in addition to that described in subsection 
(2), that is produced or acquired by the Contractor in any manner in 
connection with the Work and the cost of which is paid by Canada, shall 
vest in Canada.    

(4) The Contractor shall account fully to the Minister in respect of 
subsections (2) and (3) in such manner as the Minister shall direct. 

(5) The Contractor shall, upon the written request of the Minister, furnish 
all related logistic support and life cycle support data relating to the 
Work, including lists of suppliers, vendor part numbers, and related 
drawings, and shall exercise its best efforts to do so at no extra cost to 
Canada. 

(6) When copyright or title to an Invention or any other thing or 
information vests in Canada under the Contract, the Contractor shall 
execute such conveyances and other documents relating to copyright or title 
as the Minister may require.  

9329-1 23     (06/91)       Patent Licences and Use of Technical 
                                   Information
       

The following provisions apply to defence contracts within the meaning of 
the Defence Production Act:    

       (a) The Contractor shall promptly report and fully disclose to the 
       Minister any and all inventions, methods of processes, whether 
       patented or unpatented, conceived or made in the course of carrying 
       out the Work; and the Contractor agrees to and does hereby grant to 
       Canada a non-exclusive, irrevocable, royalty free licence to make, 
       have made and use for military purposes throughout the world and to 
       sell or otherwise dispose of any article or thing embodying or using 
       any and all such inventions, methods or processes, and a similar 
       licence to practice or cause to be practised any such methods or 
       processes.   

       (b) Canada may duplicate, use, and disclose in any manner for 
       government purposes, including delivery to other governments for the 
       furtherance of mutual defence of Canadian and such other governments, 
       all or any part of the Technical Information including reports, 
       drawings, blueprints and other data specified to be delivered by the 
       Contractor under the Contract.  
 
9329-1 24     (06/91)       No Bribe


The Contractor represents and covenants:    

       (a) that no bribe, gift or other inducement has been or will be paid, 
       given, promised or offered to any official or employee of Canada for, 
       or with a view to the obtaining of the Contract by the Contractor; 
       and    

       (b) that the Contractor has not employed or engaged any person to 
       solicit or secure the Contract upon any agreement for a commission, 
       percentage, brokerage, or contingent fee, except bona fide 
       commercial or selling representatives employed or engaged by the 
       Contractor consistent with industry practice.  

9329-1 25     (06/91)       Members of the House of Commons


No member of the House of Commons shall be admitted to any share or part of 
the Contract or to any benefit arising from the Contract.  

9329-1 26     (06/91)       Accounts


(1) The Contractor shall keep proper accounts and records of the cost to 
the Contractor of the Work and of all expenditures and commitments made by 
the Contractor in connection therewith and such accounts and records 
together with the related invoices, receipts and vouchers shall be open to 
audit and inspection by the Minister (who may make copies thereof and take 
extracts therefrom) at any time until the expiration of six (6) years from 
the end of the calendar year in which the Contract is completed or 
terminated.  

(2) The Contractor shall afford all facilities for such audits and 
inspections and shall furnish the Minister with all such accounts, records, 
invoices, receipts and vouchers.    

(3) The Contractor shall not, without the consent of the Minister, dispose 
of any such accounts, records, receipts and vouchers until the expiration 
of six (6) years from the end of the calendar year in which the Contract is 
completed or terminated, but shall preserve and keep the same available for 
audit and inspection at any time during such retention period.  

9329-1 27     (06/91)       Changes in Taxes and Duties


(1) In this section, "bid" includes a proposal, tender or offer submitted 
in response to an invitation from the Contracting Authority.     
(2) In the event of any change in any tax imposed under the Excise Act, the 
Excise Tax Act, or any duties imposed under the Customs Tariff or any other 
federal or provincial sales, excise and other like duties, taxes, charges 
or impositions after the bid submission date and which affects the costs to 
the Contractor of the Work, the Contract Price shall be adjusted to reflect 
the increase or decrease in the cost to the Contractor.  

(3) For the purpose of determining the adjustment in price referred to in 
subsection (2) resulting from any change in tax or duty described therein, 
where such tax or duty is changed after the bid submission date but public 
notice of such change has been given by the Minister of Finance before the 
date of submission thereof, the change of such tax or duty shall, for the 
purposes of this section, be deemed to have occurred before bid submission 
date.    

(4) As a prerequisite of payment, the Contractor shall forward to the 
Minister a certified statement showing the increase in cost to the 
Contractor that is directly attributable to the change in tax or duty. Any 
price revision under this section may be verified by government audit.    

(5) Notwithstanding subsections (2) to (4), no adjustment to the Contract 
Price shall be made for changes in taxes and duties occurring after the 
specified date of delivery of the Work or any parts of the Work as detailed 
in the Contract. 

9329-1 28     (06/91)       Notice


Any notice shall be in writing and may be delivered by hand, by registered 
mail or by telex or other electronic means which provides a hard copy, 
addressed to the party for whom it is intended at the address in the 
Contract. Any notice where delivered by hand, shall be given on the date of 
such delivery, or where sent by telex or other electronic means on the date 
the intended recipient's machine acknowledges receipt, or where mailed by 
registered mail on the day evidenced by the receipt.  

9329-1 29     (06/91)       Warranty


(1) Unless otherwise provided in the Contract and notwithstanding prior 
inspection and acceptance of any Work by Canada and without restricting any 
other terms of the Contract or any condition, warranty or provision implied 
or imposed by law, the Contractor warrants that for a period of twelve (12) 
months from the date of delivery, the Work shall be free from all defects 
in material and workmanship and conform with the requirements of the 
Contract, provided that with respect to Government Issue, the Contractor's 
warranty shall only extend to their proper installation in the Work. 
 
(2) In the event of a breach of the Contractor's warranty set out in 
subsection (1), the Contractor, on the request of the Minister to do so, 
shall redo, correct or make good at its own option and expense, the Work 
found to be defective or in non-conformance with the requirements of the 
Contract.    

(3) The Work or any part thereof found to be defective or non-conforming 
shall be returned to the Contractor's plant for replacement, repair and 
making good; provided, however, that when in the opinion of the Minister it 
is not expedient to remove the defective or non-conforming Work from its 
location, the Contractor shall carry out the necessary correction or making 
good of the Work at such location, and shall be paid the fair and 
reasonable costs (including reasonable travelling and living expenses) 
incurred in so doing with no allowance thereon by way of profit, less an 
amount equal to the costs of making good the defect or non-conformance at 
the Contractor's plant.  

(4) Canada shall pay the transportation cost associated with returning any 
defective or non-conforming Work or any part thereof to the Contractor's 
plant pursuant to subsection (3) and the Contractor shall pay the 
transportation costs associated with forwarding the replacement or 
returning the Work or part thereof when rectified to the location specified.  

9329-1 30     (06/91)       Care of Crown Property


The Contractor shall take reasonable and proper care of all property, title 
to which is vested in Canada, while the same is in, on or about the plant 
and premises of the Contractor or otherwise in its possession or subject to 
its control and shall be responsible for any loss or damage resulting from 
its failure to do so other than loss or damage caused by ordinary wear and 
tear.  

9329-1 31     (06/91)       Insurance Requirements


(1) Direct property damage insurance in respect of Crown-owned property 
shall be carried by the Contractor when so directed by the Minister. Where 
such insurance is required:   

       (a) the insurance policy shall be written in the joint names of the 
       Contractor and Her Majesty, as their respective interests may appear; 
       and    

       (b) the Contractor shall immediately inform the Minister when loss 
       of or damage to Crown-owned property occurs.    

(2) Liability insurance coverage shall be obtained by the Contractor when, 
in the opinion of the Minister, the nature of the Contract introduces an 
element of unusual danger to third parties. Where such insurance is 
required:     
       (a) the insurance shall be written in the joint names of the 
       Contractor and Her Majesty. Each policy shall provide that, where 
       the Crown sustains loss from a risk insured against in circumstances 
       which give the Crown a cause of action against the Contractor, the 
       policy shall protect the Crown in the same manner as it would any 
       other claimant;

       (b) the insurance coverage shall include subparagraphs (i) and (ii) 
       below and both or either of subparagraphs (iii) and (iv) as are 
       relevant to the Contract:   

              (i)   general public liability to third parties;

              (ii)  workers' compensation insurance or employers' liability 
              insurance in accordance with the legal requirements of the 
              jurisdiction where the Work is being carried out;

              (iii) aircraft liability for test, experimental, 
              demonstration or other flights necessary for carrying out 
              aircraft production and aircraft repair and overhaul 
              contracts;

              (iv)  any other liability insurance which, in the opinion of 
              the Minister, is required for the Contract.  

(3) In all cases where mandatory insurance requirements form part of the 
Contract, evidence that the insurance has been effected in the form of a 
certified true copy of either the Insurance Certificate, incorporating 
suitable clauses, or the Insurance Policy shall be submitted by the 
Contractor to the Minister.    

(4) To the extent that the Contractor has failed to carry insurance as 
required by the Contract, the Contractor shall fully indemnify and save Her 
Majesty harmless from any and all losses, demands, costs, damages, actions, 
suits, and other proceedings, by whomsoever made or prosecuted, in respect 
of the subject matters, if any, required to be insured under the Contract.    

(5) The Contractor shall, as far as practicable, require its subcontractors 
to comply with the insurance requirements set out herein.  

9329-1 32     (06/91)       Labour and Health Conditions


The Contractor shall comply with all labour conditions, and with all health 
conditions and requirements that are, from time to time, applicable to the 
Work. 
 
9329-1 33     (06/91)       Discounts


(1) This section applies to a contract which has a cost reimbursable basis 
of payment.    

(2) The Contractor shall, as far as practicable, take all trade discounts, 
rebates, refundable taxes and duties, credits, and other allowances. In 
determining the cost of articles and materials of every kind required for 
such contracts or parts thereof, all trade discounts, rebates, refundable 
taxes and duties, credits and allowances offered shall be deducted from 
gross costs, except those not taken through no fault or neglect on the part 
of the Contractor. 

9329-1 34     (06/91)       Waste and Spoilage


The Contractor shall carry out the Work as economically as possible and 
shall avoid waste and spoilage.  Where, in the opinion of the Minister, the 
character and value of any spoiled and wasted materials or defective Work 
constitutes mismanagement on the part of the Contractor, the cost of the 
spoiled and wasted materials and the cost of re-working the defective Work 
to the extent directed by the Minister shall not be considered as part of 
the cost of the Work and the Contractor shall not be reimbursed therefor.  

9329-1 35     (06/91)       Changes and Amendments


(1) Design changes, modifications to the Work and amendments to the terms 
and conditions of the Contract may be proposed by either party and the 
procedure for effecting these shall be as set out in the Contract.    

(2) All design changes, modifications to the Work and amendments to the 
terms and conditions of the Contract shall be effective only when 
incorporated into the Contract by written amendment.    

(3) While the Contractor may discuss any proposed changes or modifications 
to the scope of the Work with the Technical Authority, all such design 
changes, modifications to the Work and amendments to the terms and 
conditions of the Contract shall be in writing and require the approval of 
the Contracting Authority and the Contractor.  

9329-1 36     (06/91)       Entire Agreement


The Contract constitutes the entire agreement between the parties with 
respect to the subject matter of the Contract and supersedes all previous 
negotiations, communications and other agreements whether written or oral, 
relating to it, unless they are incorporated by reference in the Contract.  
There are no terms, obligations, covenants, representations, statements or 
conditions other than those contained in the Contract.